It was during the Herbert Hoover presidency that the idea of alphabet soup to rescue the economy began. To help fix the high unemployment caused by collapse of credit, Hoover started the Reconstruction Finance Corporation (RFC). A Hoover major relief program for the unemployed was renamed by new president Franklin Delano Roosevelt (FDR) as the Federal Emergency Relief Administration (FERA). [1]

Before FDR became president, Herbert Hoover had his own “New Deal”, according to the late Murray Rothbard. Hoover expanded credit, propped up weak companies, and increased “government spending in such forms as subsidies for unemployment and public works.” [2]

Treasury Secretary Andrew Mellon advised Herbert Hoover, after the 1929 stock market crash, “Liquidate labor, liquidate stocks, liquidate the farmers.” [3] It was “Helicopter Ben” Bernanke years before he had even been born!

Herbert Hoover was the first “helicopter parent.” “Helicopter parent” is defined by Wikipedia as parents who pay extremely close attention to their child’s or children’s experiences and problems, particularly at educational institutions. These parents rush to prevent any harm or failure from befalling them and will not let them learn from their own mistakes, sometimes even contrary to the children’s wishes. An extension of the “helicopter parent” is the “Black Hawk parent” who crosses the line from a mere excess of zeal to unethical behavior, such as writing their children’s college admission essays.

Herbert Hoover was the first “helicopter parent of the economy.” Next was Franklin Delano Roosevelt (FDR): “Eat your alphabet soup, children,” urged the kindly old man. The first 100 days of FDR’s presidency, March 9 – June 16, 1933, put unprecedented demand on the alphabet. A Civilian Conservation Corps (CCC) was started. The Agricultural Adjustment Administration (AAA) was launched: farmers were encouraged to cut production as a way to boost prices. The National Industrial Recovery Act (NIRA) established the National Recovery Administration (NRA) (not to be confused with the National Rifle Association.)

Many people reacted by shouting, “Hooray for FDR! Hooray for the alphabet soup!”

One historian, Clarence B. Carson, explains, “At this remove in time from the early days of the New Deal, it is difficult to recapture, even in imagination, the heady enthusiasm among a goodly number of intellectuals for a government planned economy.” [4]

Like helicopter parents, government officials began to hover over any economic peril.

But in May of 1935, the Supreme Court unanimously declared the National Recovery Administration to be unconstitutional. Some say the Supreme Court, by striking down this and other New Deal alphabet soup, prevented the U.S. economic system from becoming a planned economy corporate state. Roosevelt nemesis Huey Long said, “I raise my hand in reverence to the Supreme Court that saved this nation from fascism.” [4]

A few months later, Sept. 8, 1935, Huey Long was assassinated by a supposed “lone nut.” Many believed FDR had been complicit in the Huey Long assassination. (Further background: Every Man A King, Ersjdamoo’s Blog entry of January 16, 2014.)

Roosevelt fumed that the Supreme Court had decimated the alphabet soup. He took to the airwaves for a little “fireside chat”. Said FDR: “[S]ince the rise of the modern movement for social and economic progress through legislation, the court has more and more often boldly asserted a power to veto laws passed by the Congress and by state legislatures…” All those judges over 70 years old had to go; they were “too old.” But Congress wouldn’t agree to the FDR judge eliminations, and the anti-alphabet soup judiciary remained. [5]

The alphabet soup plan failed. All through the 1930s, unemployment remained high. It was World War II which finally got the economy moving again. The public generally reacted (after Pearl Harbor was allowed to happen) by shouting, “Hooray for FDR! Hooray for World War II!”

Later, when the strange events of September 11, 2001 (9/11) occurred, some called it the “New Pearl Harbor.” Again, the public waved flags and shouted, “Hooray for war!”

Seven years later, almost to the exact day, an “economic 9/11” terror attack took place at the tail end of the George W. Bush presidency. This time, again, there began to be talk of the need for alphabet soup. “Helicopter parents” of the economy began to re-appear.

Some said, though, the TARP was not enough. Barack Obama prepared for his first 100 days as president by pulling cans of alphabet soup from the cupboard and putting them in a box.

The helicoptering increased under Ben Bernanke, head of the so-called “Federal” Reserve and nicknamed “Helicopter Ben.”

Not part of the alphabet soup brigade sending helicopter rescue was Susan Lee, an economist who writes for Forbes magazine. She, in October 2008, decried the helicoptering hoverance over the economy. On National Public Radio, Ms. Lee argued that the federal government’s own obvious panic had at least worsened, if not caused, the current crisis. Bankers’ Bailout and other government interventions are “a display of utter panic” which “has resulted in massive uncertainty,” she stated. [6]

“The best course of action would have been to take our very large lumps. Most likely that would’ve meant a short, maybe steep, recession.” [6]

“But now? By aggravating the financial crisis and scaring the pants off investors, the federal government has almost insured a very bad, very long recession,” stated Lee in 2008. [6]

(A version of the above first appeared at my old Conspiracy Nation web site on October 25 and October 26, 2008.)

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About ersjdamoo

Editor of Conspiracy Nation, later renamed Melchizedek Communique. Close associate of the late Sherman H. Skolnick. Jack of all trades, master of none. Sagittarius, with Sagittarius rising. I'm not a bum, I'm a philosopher.